YRCW - Earnings call transcript Q4 2020

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Operator

Good day and welcome to Yellow Corporation's Fourth Quarter 2020 Earnings Call. All participants will be in listen-only mode. After today’s presentation, there will be a question-and-answer session. Please note, this event is being recorded. I would now like to turn the conference over to Tony Carreño, Vice President of Investor Relations. ahead. go Please

Tony Carreño

and fourth operator, call. everyone. to Welcome Thank and good full Corporation's quarter conference year Yellow you, afternoon, XXXX earnings

Joining Chief today Officer; us O'Connor, call Hawkins, Officer. on Executive Chief Chief are Operating Dan Officer; Financial Darren Interim and TJ Olivier, the

federal of other subject risks of call, of therefore, call, of statements call be on to may this that to are the may we uncertainty materially. are forward-looking not does factors. us These number this differ a facts, some forward-looking results and might law. During within and statements allow which historical statements these risk make meaning securities and all all actual The this fully format discuss made not

factors differ, and results on items cause XX-Q. risk at For filings, are that recent could please myyellow.com. and available to release earnings a our to full our afternoon’s most including These also this SEC the of XX-K refer website discussion Forms our these

a is please which may to EBITDA. release, call. presentation website. Darren. earnings X-K, today’s a Additionally, along in see today’s issued filed now referenced call our and we with reconciliation release during was the conjunction of with The release over In the be to available an earnings adjusted on income net presentation I’ll the for turn

Darren Hawkins

name that Thanks history LTL company. strong Tony a proud announce are original call. today, American effective and represents is with to good that afternoon, excited we a everyone. Corporation. Thank the our you for brand We're joining as our Yellow awareness This

year has XXXX. income quarter improve by Pricing ago EBITDA and on continued the improved by to operating $XX Turning that property million improved gains $XX.X to adjusted trend into to a sales. compared carried QX, million, during excluding and

X% the contract of negotiations. on minus around Yellow or the averaged For companies plus month January,

and industry-wide industrial driver training drivers of on recruiting fairly is level. an we keeping and a and qualified The consistent retail the additional shortage at is of the capacity remain segments problem focused improving, shortage economy LTL drivers. a With

includes hear America. to challenges pandemic more we located continue focused will you'll national facilities an in the the kicked Western XXX from and US five priority strategically of presented, XXXX Memphis. this to to and by on intermodal legacy we operations our Des COVID-XX of serve a This that Birmingham transformation about We these in at improve In with off change XXXX network a Louisville, change the in terminal shipments allows more structurally number regional integration and optimization QX, remained TJ. continuing broader make Despite this of This enterprise from terminals now while North one multiyear change to in operation optimize intermodal containers services. XXX. successfully a Moines movement operations. brings us use and throughout on Lexington, terminals markets efforts our the This providing network to implemented allows for our We one of brand, into Evansville, January. Yellow of with customers with our network than in operations the

rolling invest continue roles transformation is operational be In technology both and XXXX am most million with tremendously network them enterprise from positive and industry-leading towards impact drew it perspective. to our transportation private for most number LLC. the their leverage January, additions slated CEO is as our that and funds of one Yellow the are executive on about our Logistics Chris Sultemeier. platform in one rolling has These carrier integration path and Directors service Yellow Yellow's will significant The When records We will flexibilities experience. to we Sultemeier tranche regional and B Treasury offerings tractors recently property Mr. commitment. transforming customers. fleet Transportation also served excellent $XXX companies. be to will David used and brand to one as agreement. operate Directors, of have stock welcome their we under results our it of proven provides we and that consulting a yellow XXXX our led stock Walmart yellow McClimon, Mr. drivers completed, track our Board EVP expected of to on from a recently gained a will our as into increase served service pleased additional to due to President of throughout yellow the and and network U.S. expand excited labor the asset two operation. super of shipper utilization, recently practice our in new to Board of from announced trailers, I benefit McClimon insight efficiency are leadership age have and onboarding. We and a impressive, very with

XXXX, key refreshes executing include one and fleet plan our of our history to largest the As the company's excited I'm by the in we focus refresh. priorities turn CapEx our supporting

mitigating and our We hiring customer's on training drivers. focused will be purchase expands transportation and needs, meeting

share information optimization quarter. as We of also details phase enterprise plan and to part our network about now will continue Dan the who technology the executing to transformation. over additional the call will turn I

Dan Olivier

everyone. good Thank you, afternoon, Dan and

of in sales. $XX.X $XX.X property million, gain operating was Operating million For compared which $XXX.X gain full was in XXXX, $X.XX $X.XX in was billion billion net This in income year $XX.X year included on property million million EBITDA a included for income XXXX our $XXX.X Adjusted on million to XXXX. XXXX. compares revenue to XXXX, compared million sale. the full which $XX.X XXXX operating to net

LTL on $XX.X was the operating was in XXXX. included XXXX. quarter fourth the revenue was $XX.X $X.XX $X.X income compared fourth sale. quarter prior the for the net million XXXX fourth For billion November billion Operating up X.X%. of year; X.X%. was these million follows shipment are X.X% quarter to $X.XX compared the compared XXXX, reflected compared December tonnage fourth weight Sequential On $XX.X to day per a per per as year to in which tonnage $XX.X LTL Revenue to LTL was quarter EBITDA up fourth property million Adjusted the and X.X%, a January trends gain X.X% a during up day X%. quarter per million the increase up basis, up in and day million and for and tonnage in preliminary for October X% LTL between prior were

compared up Excluding X.X% X.X%. LTL was up of per the capital in Total at $XX fourth fuel for was end the LTL to to fuel revenue $XXX up and year. end million and per $XX XXXX. X.X% the surcharge, was Total revenue million was of the at surcharge, quarter prior revenue shipment $XX Including per shipment quarter expenditures were per liquidity down hundredweight LTL revenue X.X%. LTL fourth million compared hundredweight the was million

quarter, Now $XXX for the A the million loan, a fourth Related brief to A update on U.S. remaining million Treasury tranche and tranche available during the under $XX the loans. funded. requested was

end of used which XXX of tranche requested quarter first the drawn, been of been most quarter. back during October, which $XXX third as was B the used to all has method was $XXX will has $XX and and expect million first million of of as in B quarter tranche A the funded million the the of half million we XXXX. $XXX used million Related be tractors million more XXXX, the $XX we call, So loan remaining was XXXX earnings to of $XX in trailers tranche the than on which the acquire and

during mentioned, was B the next received Darren As January. $XXX million tranche

XXXX. million and drawn as $XXX total have million today, $XXX remaining the we remainder we of of in the So draw to expect throughout

funding the tranche XXXX $XXX our from range to liquidity we our significantly position, $XXX the million of strong expenditures in million. increase along With incremental plan with B to capital to

investments lift and gates trailers, tractors box other will to and technology, containers, addition include In assets. trucks,

about drivers. expect early as elevated performance During the optimistic year transportation there finally, first approximately to still pertains acquire about and shortage quarter although challenges qualified feel of trailers we XXX And the short-term by in it fourth XXXX some feel XXXX, through alone, we good in and caused we work specifically, XXXX tractors, the expenses to our quarter to the purchase are cost containers.

challenge in year-over-year expect I service, we that, progress. over and turn as TJ. year the to call place we With through will new performance improve the our work As to to that continue financial XXXX equipment into

TJ O'Connor

you, Yellow. Dan time Thank good and exciting afternoon, everyone. at is a It very

in implement to opportunities progress the we further our the expenditure will plans company's marketplace. history. our the enhance have largest transformation our in position with combined one in multiyear enterprise We capital are the This making

signing the we March, the increasing schools operation have expanding and country. taken academies you end taking industry implementing around Steps driving driving drivers. and to drivers include of XX expect pay the from shortage we bonus, Darren, our heard is qualified accelerating We're of a markets and certain to in hire As the number in by are of have progressions a experiencing cabins.

also internally Yellow employees, We of qualified. were in and team, part yet potential the but our dockworkers such as not box great truck see current CDL drivers

to prepared from quarter, increase in look higher road million are ago, was sufficient in over capacity. We of the impacted fourth decreased XX% our purchase which of salaries, in hours the volume the addition year increase worked. was increase will wages we at transportation in Logistics. needs to have continue expensive fewer cartridge compared which of both favorable and than rail to primarily the capacity. to were to million transportation local of $XX was Henry total meet $XX variance the due transportation The opportunities Roughly impacted a to purchase ensure expense of in and remaining by purchase use tighter to offset transportation purchase at more benefice by customers salary, growth due In largely and the benefits. by wages, An

Moving forward the to due impact cost we and positive driver can availability. will where rail the efficiency we continue of using

We help hiring to training expense. that and it drivers, continuing cartridge on reduce focus expect by will

have mid-Atlantic follows to region Legacy the terminals carrier. our in XXXX. service. transit is enterprise our blueprint times now vaster for service Richmond equipment. Customers supply the through fewer similar streamlined and Finally national purchase the to higher purchase plan The for we in a to of and quarter steps are December is year-over-year operations we as basis, expect we trailers an expense as tractors, use day will part This regional National super regional executed anticipate The five to planned through transformation. Memphis a transportation expansion Texas the states. in continue month the a in and the couple more which we regional CapEx short-term the plan coordinate in change, mid-South we implemented a leased of decrease XXXX. connects in This example our expansion containers next will and rentals change add first was in of and to see of On access intermodal taking as and

to professionals the work we had the one injury haul, closing, maintenance improvement face to continue dedicated call model. and in seems to will focus set thank and The of I to their and technology commitment I We phase service a in-cab safety resources, challenge the of to consolidating with performance. phase America safety. for revised our Darren now supply minded in at closing support on like network both our In platform. turn and delivery of the optimization accident Yellow. XXXX across North and transformation. sales, pickup comments. super pandemic, enterprise sincerely technology one of technologies, Even back the line on appreciate the and operate safety some regional I'd we'll includes completed, When customer human in

Darren Hawkins

well-positioned multiyear in I technology beyond. enterprise customers remain of happy answer afternoon. and we We professionals Thanks every your would transportation you, providing LTL coast. have. XX,XXX transformation from essential are that for any communities thank They equipment freight we tied to our the time services coast investments the embrace progressing, be may Thank I to road comprised and serve. Yellow nearly this and the along challenge with for to team questions and day that I'm about our excited now continue confident TJ. the for want freight XXXX ahead with capacity, you

Operator

with Atkins Jack from come will today Stephens. question first Our

Jack Atkins

on question. Jack that of 'XX? Thanks in or I what there business equipment can to the want for with share everybody Act start expect funding impact info us new additional can source the get you this with you sort Hey we our on purchasing of how of impacting the Cares and that's any that for is taking weight impacts the and afternoon. been savings you’ve

Dan Olivier

the of to trailers guidance but of I and on quarter. we as We're I'll not the economy any what taking of equipment mentioned achieve lower half the going and delivery back and tractors expect say certainly in is fuel specific that, the new on course tractors improve maintenance to we around began cost bring we as that

on fourth though a relatively impact. positive unit that of every the comes we even The So units quarter fleet the on was a is of has overall during small. brought number percentage

financial didn't the we much fourth during So see quarter. impact of any

and the As we pronounced that's economy. start units, maintenance equipment cost in continue see we're the a to bringing able to older to XXXX impact on on more really more when sunset fuel and we'll

Jack Atkins

and in Are and to that? new Is like that capacity? a equipment up to thank of seeing market? have customer the as that network? the wins new translating appetite stuff and fleet become then sort Great been reaction the it the been Okay. subject, follow what's into you to for on go doing reinvesting increased the work Has contract all you easier

Darren Hawkins

we're enterprise talked doing that always the customer. network we having large advantage customer. the Yellow to onboarding XXX,XXX make on widespread Yellow, nice when up transformation, is companies the Everything it's of had focused We've changes, customers. customer close across about all and of the base all through the a the equipment a

As negotiations had X,XXX outcomes almost we X% running went through aspect pricing mentioned that fourth forward. and the from a we're in positive I nice as in moving quarter, range we the negotiations very

base encouraging. of the good. is well. strong. up perspective to seeing now and favorable continues demand a customer that's daily Demand that on consumer the the levels standing remain So solid. and were proud we're is a choose that Construction Manufacturing Right looking I will from basis. is Yellow confident pricing am customer all is

Operator

from question Research. Group And Scott your with comes next Wolfe

Rob

January. us quarter? remarks an you up Darren were fourth your prepared in what of you Can in think X% had update I renewal noted that contract the the give those were in month

Darren Hawkins

was the Yes fourth quarter X.X%. in it

Rob

increase? kind but had I And rate I one one think last this year? if of I seen announced gone early a had general has you have YRC announced time through, curious don't guys

Darren Hawkins

absolute timing. nice you broader marketplace guess enterprise sure brands contemplating question are can the or on it's I from effect did of this the that. all you kind the The that with we've beginning continue guys operate X.X%. to We It Yellow and customer the of multiple I that asking do service into Monday today, brand to so the thank for in make a transformation at you offerings into facing plan obviously are past kind referenced I perspective. got clarity that went corporation rolling

leverage So give that asset then we all rolling single the and platforms the network. consolidate the Agreement. the locations increase our different expected naturally Labor service It'll of physical to our in property, It we expanded number platform us stock utilization operational in flexibilities is into will technology rationalize a to gained offerings. also the XXXX going

of under Yellow carrier. that the super Yellow So operate end the one at Rob company. will result be regional brand network, be a as run one will will one Yellow will

half the first comes These we XXXX present to marketplace. the together, all to now continue seamless customer. will will our between the when Now to be timeframe and brands in of that changes the all

mentioned the five engage gets as corporation. experience we made one the Just being carrier changes in, customer able and QX, get offerings markets to just that the easier of by the entire I in

half first So and Yellow to brand that a one be will between now regional market will of the super Yellow as become which going will carrier occur. XXXX.

Rob

we the of cost guess And this opportunity super of about transformation the and should Darren we think process saving carrier, of I cadence kind broader kind as the think how company? into about for regional the the

Darren Hawkins

mentioned YRC for operating you freight in we've just Birmingham Alabama I operating separately, they're at reducing markets example, in together. and as certainly where duplicate I've those Holland today done All mentioned just efforts the

than So our That's that able service one having equipment. from right tractor, customer, driver, at the drivers of one one one with two rather we're companies two what of utilization in asset to that direction. drives set

carriers right the of putting Texas pin starts is that same mentioned Reddaway freight in and moving what aspect the place continue now platform class and with Holland Over only the it for better. mid-Atlantic, very thing throughout YRC follow with steadily to and we'll disruption in than as YRC three network. that by together and time operate TJ the The that. technology put the period, connectors new freight be platform will the little also in will next service networks We those day year, companies our regional also allows operation good one moving experience adjusting to and best the from network a as us with customer's makes over to changes

Rob

hop I will into over queue. turn it and back

Operator

conclude are There over to This I'd back the closing further any no call will instructions] to question-and-answer the company remarks. and questions. for our turn [Operator session

Operator

My we follow-up Group have actually apologies. Research. now We do from have Wolfe a with -- Scott

Scott Group

taking the for follow-up. Thanks

the In with Is tranche call cadence half to to of that Treasury loan. get million? B When should kind additional U.S. the about want terms How the the will front color terms remaining with of the be $XXX investments? think we we loaded? of in all roughly going I capital

Darren Hawkins

this Dan. Yeah is

that is get equipment, of our quickly depend and hand the get us. that because The can new tractors able use on it As remaining OEM. the and $XXX trailers get on to alone, and we XXXX. That approximately we three comments, as majority first I of the XXXX to to that we expect $XXX quarter expected far to expect of the and would opening XXXX the on the for million somewhat the next stock be then in to from return million, remainder the during months said my to throughout tractors expect the trailers, as two and in spent earlier we that's investment mentioned rolling and the the we better we the request as we're acquire as

Wolfe Research

guys treasury new buying tractors used going you Are are could with you're are to in you of also current terms the you contemplating additional the over near-term? any buying exclusively color X,XXX And funds? getting like the provide be

Darren Hawkins

The be not our B new vast in year majority the tranche tractors trailers. our just of equipment the the entire to CapEx plans is going and in

of the XXXX leases any are buy funds, during doing of a outs B we're in lease We that few into also and XXXX support not the new and quite because our be there well. liquidity position we'll as entering tranche

Wolfe Research

about, buyout loaded And the the Dan think of perspective? a are frontloaded, we should plaintiff capital and magnitude backend those how to from

Darren Hawkins

The come be they as easily going the resend fairly are files they due year. lease, will the just lease those throughout as happens to spread

Operator

And we have with an Stephens. Atkins additional question from Jack

Jack Atkins

e-commerce Thanks for I thanking a sort your guys. LTL Hey that shippers see had resiliency network we're impacts feels continuing to about in in follow-up. and of LTL also seems like demand the like impacts the the optimization among to plan. new starting in the It of market, There end question the we're seen how of some shippers. markets. the we've landscaping customer the type feel traditional

way have coverage popped have you or right is that are look when your opportunities some the on what that over So geographical think positioned needs last might execute etcetera you found up footprint, that you about identified year? the this that to network months nine new there or you've is the

TJ O'Connor

that take Thanks to for question. Happy asking.

additional fair of that, e-commerce well positioned and business for and on well and are warehousing with I we're e-commerce. space lot see first is seeing suited of while see feel for players. that we the we're we we asphalt new What While e-commerce amount do large, medium a we off a

of that regional our So capabilities capabilities, our overall favors network super Yellow.

these calendar terms and their for in with very growth us touch we're their periods them not we standpoint. they're seeing that a been quite and well in rates, obviously players of their they as they from particularly So to COVID. We've very stay communicate We're capacity growth closely well-suited surge fact. gain out a a of interest few going robust ecommerce with matter to need for pretty help since of able really that that

increasing of on and reflection the related going shippers pandemic with what's capacity. needs COVID So to have and they there those is for ecommerce

Jack Atkins

speak complement Okay. the I Logistics, little business see and to and what Henry navigate role has even bit the helpful. to rest a line? now helping is strategic If you your can the more trail sort importance that could it of down of how and playing That's the you you or very one market here

TJ O'Connor

for Logistics to that also area. market certainly is allow companies number that and XXXX, the really have nice customers also on the services Dan from our asset-based asset growth we any salespeople the with that margin. our and nice to with the do with stories are purchase Henry Logistics complements comes of services the able services We saw the Henry to broadens of Logistics, with connect that certainly got of good all that the provide, number comments they elevated very that other access side a transportation to. logistic many customers It we in but additional in the company. all access asset associated Henry the

call that can out. we So

Darren Hawkins

Yeah I'd went rapid relatively growing percentage that small revenue, year the just it's a say that total although growth our at Henry Logistics did as of accelerate pace year-over-year on. is still a and

Operator

this turn and And over call like for closing our company Q&A conclude to any to I'd back remarks. will the the session

Darren Hawkins

the Thank you, This any I with today. operator and for turning additional have. thanks Please operator our contact call you. you everyone joining may that back Tony and to call to am questions concludes us again

Operator

now concluded. has you today's conference Thank The presentation. attending for

disconnect. now may You

Yellow (YELLQ) 5 Feb 212020 Q4 Earnings call transcript